LexSTATE OF HARYANA versus M/S MARUTI UDYOG LTD. AND ORS.
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STATE OF HARYANA
A
v.
MIS MARUTI UDYOG LTD. AND ORS.
SEPTEMBER 7, 2000
[K.T. THOMAS AND R.P. SETHI, JJ.]
B
Sales Tax :
Haryana General Sales Tax Act, 1973-Section 39; Sub-section (5);
proviso--"Unable to pay the whole of the amount"-Ambit and scope of- C
Held, inability to pay refers to paying capacity of person concerned and not
his legal or actual liability to pay the amount demanded
Respondent-company is a registered dealer under Haryana General
Sales Tax Act, 1973 and Central Sales tax Act, 1956. Sales Tax D
Commissioner, after serving a notice on the company, suo motu revised
assessments done under both the Acts, enhancing gross turnover of the
company by adding excise duty to the turnover disclosed in returns filed and
disallowing part of the amount of rebate allowed by the assessing authority.
The company filed an appeal before the Tribunal together with an application
for entertainment of the appeal without prior payment of tax and interest as E
required under sub-section (5) of section 39. On rejection of the said
application, the company filed a Writ Petition in High Court, which disposed
of the petition directing the company to furnish bank guarantee for the
additional demand. The Tribunal disposed of the appeal by remanding the case
back to the Commissioner for fresh decision after giving the company a F
reasonable opportunity of being heard. The Commissioner revised the orders
and raised additional demands. The company again filed an appeal before the
Tribunal together with a similar application filed before. The application was
again rejected and the company again filed a Writ Petition before the High
Court. The High Court quashed the order of the Tribunal and directed it to
pass a speaking order after hearing the company in accordance with law. The G
Tribunal rejected the application relying upon a Full Bench decision of the
High Court and directed the company to deposit the amount within a certain
period. The company again filed a Writ Petition before the High Court, which
was allowed in favour of the company. Hence this appeal by the State before
this Court.
185
H
186
SUPREME COURT REPORTS [2000] SUPP. 3 S.C.R.
A
The company contended that ambit and scope of the words "unable to
pay the whole amount of tax assessed" used in proviso to sub-section (5) of
section 39 of the Sales Tax Act is of wide amplitude which refers both to the
financial position of the assessee and to the inability to pay the tax on account
of non-collection from the customers. The company, at the time of arguments,
B made an alternative plea that in case this Court is not inclined to uphold the
judgment of the High Court, a relief may be granted for dispensing deposit of
interest portion on the amount of Central Sales Tax assessed by the order
challenged in statutory appeal.
c
Disposing the appeal, the Court
HELD: 1.1. A right of appeal is the creature of the statute and has to be
exercised within the limits and according to the procedure provided by law. It
is filed for invoking the powers of a superior court to redress the error of
courts below, if any. No right of appeal can be conferred except by express
words. An appeal, for its maintainability, must have a clear authority of law.
D Sub-section (5) of section 39 of the Haryana General Sales Tax Act, 1973
vests a discretion in the appellate authority to entertain an appeal if it is filed
within sixty days and the amount of tax assessed along with penalty and
interest, if any, recoverable from the persons has been paid. The aforesaid
restriction is subject to the proviso conferring discretion upon the appellate
E authority to dispense with the deposit of the amount only on proof of the fact
that the appellant was unable to pay the amount. Before deciding the appeal,
the appellate authority affords an opportunity to the party concerned to either
pay the amount or make out a case for the stay in terms of proviso to sub-
section (5) of section 39 of the Act. Once the conditions specified are complied
with, the appeal is born for being disposed of on merits after hearing both the
F sides. Thus sub-section (5) regulates the exercise of right of appeal conferred
upon the assessee under section 39 of the Act, the object being to keep in
balance the right of the aggrieved persons and the right of the State to speedy
recovery of tax. {193-A-C]
G
1.2. The inability mentioned in the proviso to sub-section (5) of sectExcerpt shown. Read the full judgment & AI analysis in Lexace.